Brief:
- ByteDance, the Chinese company best known for its viral video app TikTok, named two executives to run its business in China. The move will give founder and CEO Zhang Yiming more time to focus on overseas operations, including those in the U.S., that are significant drivers of growth, The Wall Street Journal reported.
- ByteDance appointed Zhang Nan to the newly created role of CEO for China operations. He previously led Douyin, the company's domestic version of TikTok. ByteDance also promoted SVP Zhang Lidong to chairman. The three men aren’t related despite having the same family name, the Journal reported.
- Zhang Yiming will continue to be global CEO of Bytedance, and will work on expanding the company's global management team and long-term strategies. The company currently has 60,000 employees in 30 countries, and plans to almost double its headcount to 100,000 by the end of the year, Reuters reported.
Insight:
ByteDance's managerial moves come as the owner of TikTok seeks to rapidly expand its global workforce to keep pace with the massive popularity of the viral video app. TikTok was downloaded an estimated 1.65 billion times during the first year and a half since its introduction in mid-2018, and ByteDance has a significant opportunity to monetize that audience through advertising, ecommerce and direct sales of its digital coins. With the appointment of two executives to oversee domestic operations, ByteDance founder and CEO Zhang Yiming can dedicate more time to building up operations lucrative media markets like the U.S.
The appointments also can help to insulate Zhang Yiming from possible accusations that China's government influences his decision-making, as the Journal notes. ByteDance faces challenges in the U.S. amid growing worries that TikTok presents a possible threat to national security. TikTok has tried to counter that criticism, saying China's government hasn't demanded that the company share information about its users, and that it keeps data on servers outside the country.
The Committee on Foreign Investment in the U.S. (CFIUS), which reviews mergers and acquisitions that could affect national security, is currently looking at Bytedance’s 2017 acquisition of the startup Musical.ly, the predecessor to TikTok that helped the app gain a foothold in the U.S. If the U.S. government orders Bytedance to divest its U.S. operations, the company likely would have to sell them to another company or group of investors, as happened with dating app Grindr.
ByteDance has looked at establishing a global headquarters outside of China to deflect perceptions that it's a Chinese company, the Journal reported. Singapore, London and Dublin are among the cities being considered. TikTok this week said it will open a new "transparency center" in Los Angeles in May, letting outside observers to monitor how its employees moderate content on the app.
